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I just reinstalled ST completely to solve this, thrice now. Have been looking for a resolution for this for a while. How can a company have such a blatantly idiotic bug in it? My assumption is that since Borland bought ST, they haven’t used ST as source control for their ST codebase. Eat your own dogfood – I find more errors that way than all users combined have ever found – not while debugging/testing, but while using it as a user would.

I stumbled upon the same problem and decided to follow your advice. So, I deleted the folder Local Settings\Application Data\Borland\StarTeam (which, by the way, had only the empty folder Tools inside, nothing else), restarted StarTeam and the problem miraculously disappeared.